Capital One 2014 Annual Report Download - page 219

NOTE 9—DEPOSITS AND BORROWINGS
Deposits
Our deposits, which are our largest source of funding for our operations and asset growth, consist of non-interest
bearing and interest-bearing deposits, which include demand, money market, time deposits, negotiable order of
withdrawals (“NOW”), and saving accounts.
We had $180.5 billion and $181.9 billion in interest-bearing deposits as of December 31, 2014 and 2013, respectively.
Time deposits issued by domestic offices totaled $8.3 billion and $9.2 billion as of December 31, 2014 and 2013,
respectively. Of these deposits, the amount of domestic time deposits with a denomination of $100,000 or more was
$2.3 billion and $2.9 billion as of December 31, 2014 and 2013, respectively. Time deposits issued by foreign offices
totaled $977 million and $1.2 billion as of December 31, 2014 and 2013, respectively. Substantially all of our foreign
time deposits were greater than $100,000 as of December 31, 2014 and 2013.
Securitized and Unsecured Debt Obligations
We use a variety of funding sources other than deposits, including short-term borrowings, the issuance of senior
and subordinated notes and other borrowings, and securitization transactions. In addition, we utilize FHLB advances,
which are secured by certain portions of our loan and investment securities portfolios, for our funding needs. The
securitization debt obligations are separately presented on our consolidated balance sheets, while federal funds
purchased and securities loaned or sold under agreements to repurchase, senior and subordinated notes and other
borrowings, including FHLB advances, are included in other debt on our consolidated balance sheets.
Securitized Debt Obligations
Our outstanding borrowings due to securitization investors were $11.6 billion and $10.3 billion as of December 31,
2014 and 2013, respectively. During 2014, $4.3 billion of new debt was issued to third-party investors from our loan
securitization trusts, offset by $3.0 billion of debt maturities.
Senior and Subordinated Notes
As of December 31, 2014, we had $18.7 billion of senior and subordinated notes outstanding, net of fair value
hedging losses of $179 million. As of December 31, 2013, we had $13.1 billion of senior and subordinated notes
outstanding, net of fair value hedging losses of $8 million. During 2014, we issued $7.8 billion of long-term senior
unsecured debt, comprised of $250 million of floating rate notes and $7.5 billion of fixed rate notes. During 2014,
$2.4 billion of outstanding unsecured notes matured. See “Note 10—Derivative Instruments and Hedging Activities”
for information about our fair value hedging activities.
During 2013, we exchanged $1.2 billion of outstanding 8.80% subordinated notes due 2019. The transaction
involved offering current holders market value plus an exchange premium for these outstanding notes. The
consideration was paid through a combination of $1.4 billion of new 3.375% subordinated notes due 2023 and
cash of $209 million. In addition, in 2013, we exchanged $763 million of outstanding 6.75% senior notes due
2017. The transaction involved offering current holders market value plus an exchange premium for these
outstanding notes. The consideration was paid through a combination of $839 million of new 3.5% senior notes
due 2023 and cash of $88 million. Both exchanges were accounted for as a modification of debt. There were no
such exchanges during 2014.
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CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)